ALEGACIONES PRESENTADAS Y TRATAMIENTO DE LAS MISMAS EN LOS SUPUESTOS QUE NO HAYAN

Statement

The community and its needs are at the centre of KMAD’s programmes, rather than a conventional CSR programme which takes the business’s responsibilities as its starting point.

KMAD’s vision is to achieve a community of:

• Healthy people living in safe and dignified conditions, free of disease and hazards; • An informed and independent population

with access to education and opportunity for individuals to reach their potential; • Many cohesive social groups and

networks contributing to sustainable development.

Since KMAD’s first activities were started in 2004 there have been significant improvements in infrastructure, with all the villages now electrified, water access improved and mobile phone coverage throughout the community. Direct and indirect employment opportunities have been created, training initiatives have been implemented and numerous development activities started by KMAD have now matured. 2015 was the final year of implementation of the 2013-2015 Strategic Plan, the details of which were finalised through extensive community consultations and the goals of which have formed the basis of a Community Agreement which

was signed by the local leaders, the District Government and Kenmare in 2013. A new Strategic Plan for the period 2016 to 2018 has been drafted and is currently in the final stages of community consultation. KMAD’s goal is to work to:

• Facilitate the economic development and income generation capacity of the local community. This includes maximising the benefits of the Mine by creating secondary economic opportunities in the community and generating long-term sustainable economic opportunities independent of the Mine, as well as supporting facilitating mechanisms such as education, adult literacy and vocational training;

• Improve the wellbeing of the local population. This includes supporting social development in health, with special focus on community health awareness, sports, and the construction of

appropriate social infrastructure such as water pumps (accompanied by building the capacity of local water management committees) and educational facilities (including investing in vocational training). KMAD’s core values are:

• Participation: priorities for activities are based on local needs as identified by community members, and only those development initiatives with active local participation are supported by KMAD;

• Sustainability: investment in the building of skills and capacity will accompany any projects supported by KMAD to ensure their viability and only those initiatives with strong potential are supported; • Equality: all people and communities

have the same rights and are to be treated equally. KMAD particularly promotes the involvement of women in all its activities to achieve this aim;

• Efficiency: maximising local benefits of resources and leveraging off the mine infrastructure rather than setting up parallel systems and evaluating activities to look for improvement and effectiveness;

• Integrity, Honesty and Transparency: KMAD is open about its allocation and use of resources and in its dealings with all its partners and stakeholders. KMAD operates in three main areas:

Livelihoods and economic development

This includes capacity development and financial support to income generating initiatives, agriculture/food security and livestock support and economic infrastructures.

Health development

This includes support of the health sector – capacity development of medical staff, equipment, materials and infrastructure improvements, community health and HIV awareness, water and sanitation.

Education development

This includes support to the education sector including support for capacity development of teachers, educational materials and equipment, school infrastructures and furniture, vocational training, community environmental awareness and sports.

Organisational Development Operation

KMAD activities are supervised by the Kenmare Country Manager in coordination with the Corporate Affairs Manager and KMAD Coordinator who is responsible for the day to day management of the portfolio of activities together with a total of five field staff. The Community Liaison Officer (a member of the Mine operations team) helps to monitor activities. Financial information is maintained by the Company’s Financial Controller.

Sources of funding

The majority of funding to date has come from donations from Kenmare. Additional resources have been obtained through direct support from partner institutions such as FMO (the Netherlands Development Finance Company) who have supported the community health project. Donations have also been received from Kenmare employees. KMAD has leveraged indirect support by working with partners who have projects in the region and can extend their focus to include KMAD’s target area with minimal additional effort.

Implementation Strategies

KMAD’s approach to project implementation includes a mixture of direct, contracted, and collaborative implementation.

Direct implementation

KMAD has in some instances directly managed activities, such as construction projects and the promotion of small scale business opportunities. Direct implementation is generally the most rapid implementation method but is also very time consuming and, given the desire to maintain a lean operational structure, KMAD’s capacity to carry out direct implementation projects is limited. Contracted implementation

KMAD provides funds to an organisation for implementation. There are a number of organisations working in Nampula province active in community development. Working with these organisations helps leverage their existing organisational capacities and field experience. As various projects are identified KMAD works to explore possible linkages. This has generally been the preferred form of implementation method in order to ensure high quality of implementation.

Collaborative implementation KMAD increasingly seeks to develop long-term collaborative relationships with partners in the area. Such relationships will be pursued with institutions, both government and non-government organisations, that have a long-term interest in the region. Collaboration encompasses planning of activities and management of resources. While such arrangements take considerable time to develop and there are inevitable challenges in coordination, these have long term benefits to the community in terms of greater assistance.

Enterprise Projects

In 2015 an extensive review involving KMAD, local community leaders and the District Government was carried out to assess the impact and viability of the income generating projects. All parties agreed that no new business projects would be financed whilst this review was ongoing.

KMAD receives business proposals from the community and these proposals are then analysed for their economic viability. If considered viable they receive funding. A number of proposals have potential but are not considered viable in their proposed form. In these cases discussion are held with the proponents to investigate whether certain changes could be made to make the proposed projects more robust. The community felt strongly that when proposals were revised, it weakened the buy in from members and therefore contributed to a number of businesses performing poorly. KMAD agreed that in future projects would either be implemented in their original proposed form or not at all. An increased role for community members monitoring the projects was also agreed. These changes were implemented from the beginning of 2016.

Weather events took a toll on businesses during the first quarter of 2015, when the area was without power for 57 days as a result of power supply disruptions. In addition, there was serious flooding and the roads became impassable leading to many of the businesses having supply difficulties.

At the end of 2015 there were 27 economic development projects supported by KMAD benefiting a total of 268 beneficiaries (and by extension their families). The businesses generated revenue US$114,152 and profits of US$30,979.

Corporate Social

Responsibility

Statement

KMAD continued to support the farmers’ associations at Nathaca, Nathuco and Mpago that produce vegetables for sale to both the Mine’s catering company and the local market. Virtually all the crops were destroyed in the flooding that took place in Q1 2015. Local farmers were unable to supply the catering company, forcing new sources of supply to be identified. Farming and marketing has since returned to normal. The farmers sold a total of 4,449 kg of vegetables (2014: 14,868kg) and 3,570kg of fruits (2014: 10,546kg) generating revenue of US$13,378 (2014: $34,092) and profits of US$3,103 (2014: $6,808).

The conservation agriculture project, initiated in 2014 in partnership with Kurima Povo Cubatsirana ("KPC") was